Zero Recovery Rate for Minor Landlord Deposit Guarantees Raises Concerns

The amount of deposit guarantees for leases involving minor landlords has remained steady at around 40 billion won for two consecutive years, but the recovery rate for guarantee incidents has been alarmingly low. In both 2024 and 2025, the recovery rate for incidents related to minor landlords was recorded at 0%. While there are plans to disclose the history of legal representatives who manage contracts and finances behind the names of minors, concerns about the effectiveness of this measure persist.

According to industry sources on June 17, a group of 11 lawmakers, including Kang Seung-kyu of the People Power Party, proposed an amendment to the Housing and Urban Fund Act the previous day. This amendment aims to include the legal representatives of minor landlords in the list of habitual debtors subject to public disclosure.

The proposed amendment would require that when a minor is a landlord, information about the legal representative's status regarding deposit guarantee memberships, history of guarantee incidents, and compliance with debt obligations over the past three years be provided to tenants. The intention is to prevent repeated guarantee incidents that exploit the names of minors by including legal representatives in the list of habitual debtors.

Data from the Housing and Urban Guarantee Corporation (HUG) shows that the amount of deposit guarantees for leases involving minor landlords increased from 39.5 billion won in 2021 to 50.8 billion won in 2022 and 51.3 billion won in 2023. This amount decreased to 42.5 billion won in 2024 and 40.7 billion won last year, but it has consistently remained above 40 billion won for two years.

The amount of guarantee incidents has risen from 300 million won in 2019 to 3.4 billion won in 2024. Although it dropped to 1.3 billion won in 2025, it is still more than four times higher than in 2019. The recovery rate was 32% in 2021, but it has been 0% for two consecutive years in 2024 and 2025. Of the 5.9 billion won in subrogation payments over the past five years, approximately 4.5 billion won remains unrecovered.

The core issue lies in the accountability structure. Under current law, the parents or legal representatives of minor landlords are not registered as joint guarantors when signing up for deposit guarantees. This makes it difficult for HUG to claim reimbursement from legal representatives or investigate their assets in the event of a guarantee incident, and they are also excluded from the list of habitual debtors.

There have been actual cases of harm. A 10-year-old child born in 2015 acquired multiple rental properties in areas such as Hwagok-dong and Gonghang-dong in Gangseo-gu, and Sinwol-dong in Yangcheon-gu, and failed to return 900 million won of a total deposit of 1.35 billion won. In Jeonbuk, an 8-year-old child did not return 296 million won of a total deposit of 921 million won for seven rental properties.

The disclosure of legal representatives' histories is intended to allow tenants to verify the history of guarantee incidents and compliance with debt obligations when entering into contracts with minor landlords. This approach aims to provide a basis for avoiding risky properties without prohibiting the signing of guarantees.

However, there are concerns about whether mere information disclosure will be sufficient. Even if the debt history of legal representatives is made public, tenants may struggle to verify it properly or may have limited options, making it difficult to avoid risky properties. Specific designs for the disclosure targets, methods, and notification procedures are necessary to enhance effectiveness.

Some argue that beyond information disclosure, legal representatives, such as parents, should be made joint guarantors. However, mandating joint guarantees could require prior consent from legal representatives, potentially hindering tenants' ability to secure guarantees altogether.

HUG acknowledges the need to strengthen the responsibilities of legal representatives but remains cautious about making joint guarantees mandatory. A HUG official stated, "Unlike joint guarantees, the information disclosure method does not restrict tenants' ability to secure guarantees while allowing them to check the debt history of parents when contracting with minor landlords. This could have a preventive effect, enabling tenants to avoid problematic properties themselves."